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Table of Contents
CHAPTER I Understanding organized crime
Introduction 1
Attributes of organized crime 2
Understanding the mafia
6
Categories of organized criminal behavior
7
Provision of illicit services 7
Provision of illicit goods 8
Conspiracy 8
Penetration of legitimate business
8
Extortion 9
Corruption 9
Models of organized crime
9
Cressey’s cosa nostra model
12
Albini’s patron-client model 17
Smith’s enterprise model 19
Lanni’s kinship group model 20
Chambliss’ crime network model 21
Haller’s partnership model 21
Blocks description of enterprise and power syndicates
21
Nontraditional organized crime 24
Organizational constraints
26
Reuter on economic constraints
26
Mastrofski and potter on organizational constraints
27
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CHAPTER II Transnational crime
International criminal organizations 29
The Big Six International Criminal Organizations
31
A. Italian criminal enterprises
31
B. The Russian mafia
38
C. Japanese Yakuza 43
D. The Chinese Triads 44
E. Colombian drug cartels 48
F. Mexican criminal organization:
The Mexican Federation
Other international criminals and criminal organizations
A. Nigerian criminal organizations
56
60
60
CHAPTER III International terrorist organizations
A. Introduction
63
B. Terrorist organizations
64
Strategic alliances between the transnational
criminal organizations
66
A. International strategic alliances generally
66
B. The Colombian cartels: a strategic
alliance case study
67
CHAPTER IV Money laundering
Money laundering: what is it?
69
Money laundering: why fight it?
71
The mechanics of money laundering
72
The three stages of money laundering
74
Money-laundering techniques and tools
77
A. Smuggling 77
B. Structuring 79
C. The use of front companies
80
D. The use of shell or nominee corporations
83
E. Bank drafts 84
F. Counterbalancing loan schemes
84
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G. Dollar discounting 84
H. Mirror-image trading 85
I. Reverse flips
86
J. Inflated prices
86
K. The Colombian black-market peso exchange
87
United States v. Saccoccia: the ultimate
example of la vuelta 89
CHAPTER V The illicit drug trade
Introduction 93
Drug control: a br1ef history
94
Early drug regulation 95
The impact of drugs on society
96
Adult arrests for drug law violators
97
The pervasiveness of drug abuse
98
Measuring drug abuse 98
Drugs and crime
100
How are drugs and crime related
102
Drugs and violent crime
103
Drugs and income-generated crime
103
Drugs and organized crime
103
Players in the drug business
105
The business of drugs
106
Trends of organized drug trafficking
106
Recent trafficking patterns
107
Heroin’s return
108
The drug trade today
119
Southwest and Southeast Asia
110
The golden triangle
110
The golden crescent
111
Mexico
111
South American countries
115
Bolivia
115
Peru
115
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Colombia
116
Common drugs of abuse
116
Categories of dangerous drugs
117
Narcotics
117
Stimulants
118
Hallucinogens
120
Inhalants
123
Drug control strategies
123
Other control strategies
127
CHAPTER VI A brief history of terrorism
Overview
129
Violence and terrorism
129
State terrorism
135
Cyclical nature of terror
138
Contemporary events: Historical roots
141
State and religious sponsored terrorism
143
State terrorism as warfare in the 21st century
144
State-sponsored terrorism: the big seven
148
Iran 148
Iranian terror against Israel 150
Iranian assistance to Palestinian terrorist organization
151
Palestinian Islamic jihad 151
Hamas 151
Hizballah 152
Terrorism brief 1 155
The Rushdie affair 155
Cuba
156
Iraq 157
Libya 158
U.S. Reaction to Libyan terrorism
159
Terrorism brief 2
160
Pan Am flight 103 (Lockerbie)
160
North Korea
161
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Sudan
162
Syria
165
State-sanctioned and religious terrorism
170
The crusades and genocide 170
The Turks and the first crusade
171
State terror and genocide 173
Mindsets of mass destruction
176
New types of post-cold war terrorists
176
New forms of terrorist-threat scenarios
179
CHAPTER VII Organized crime in the philippines
A. Robbery/hold-up group 183
1. “akyat-bahay” gang 184
2. “salisi gang” 184
3. Bukas kotse gang 184
4.“carnapping” 184
5. “dugo-dugo” gang 185
6. Budol-budol” gang
185
7. “ipit-taxi” gang 185
8. “bonet” gang 185
9. “lag-lag barya” gang
186
10. “martilyo/boltcutter” gang
186
11 “acytylene gang
186
B. Bank/pawnshop robberies
186
C. Kidnap-for-ransom 188
D. Hijacking 190
E. Illegal gambling 191
F. Illegal recruitment/ prostitution
192
G. Drug trafficking
193
H. Pyramiding scam in the Philippines
194
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UNDERSTANDING ORGANIZED CRIME
Chapter I
UNDERSTANDING ORGANIZED CRIME
INTRODUCTION
On three separate occasions between 1986 and 1991,
reputed New York mob boss John Gotti stood trial facing federal
racketeering charges. However, to the surprise and dismay of
prosecutors, he was acquitted each time. Some say that the
acquittals were a result of furtive trial techniques by Bruce Cutler,
Gotti’s attorney; some contend that the government’s case, passed
on plea-bargained testimony, was fatally flawed; while others
speculated that there had been jury tampering. Whatever the
reason, on each occasion the charges against Gotti failed to stick,
earning him the nickname “Teflon Don.” Finally, in 1992, the
flamboyant Gotti was convicted and sent to prison on racketeering
charges and for the 1985 murder of his own crime boss, Paul
Castellano. This case not only captivated the American people but
helped perpetuate the public’s perception of organized crime in
America.
Part of the recent concern about organized crime is that
it is becoming more and more transnational and, in some cases,
posing a global threat. This threat is especially evident in the
breakdown of the former Soviet Union and the emerging role of
opportunist Russian “Mafia” members. Furthermore, with regards
the changes in political conditions and the technological advances
around the world, the 1990s have already witnessed crimes relating
to continued formalizing in the global drug trade, an increase
in computer-related crimes, and the smuggling of radioactive
nuclear material, to name a few. In addition to the entertainment
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industry, sensational images, such as those portrayed by the
electronic and print media, also tend to confuse our perceptions of
organized crime. Consequently, the study of this all-important field
of criminal justice is laden with misperceptions, distortions, and
outright inaccurate information.
Just what is organized crime, and how does it relate to
other types of crime? In an effort to sort out the true meaning of the
term as well as to gain an understanding of the phenomenon, in this
chapter, we present organized crime, beginning with definitions of
the term and moving on to a discussion of the various models that
are believed to represent contemporary organized crime systems.
Despite a plethora of literature on organized crime, controversies
regarding its definition, structure, functions, and how best
to control it continue. The only thing that is really known with
certainty about the subject is that organized crime represents a
serious social problem that survives despite aggressive anti-crime
efforts by law enforcement agencies.
ATTRIBUTES OF ORGANIZED CRIME
To develop a workable definition of the term organized
crime, a number of dimensions or attributes can be identified that
tend to describe the function and structure of the phenomenon.
Understanding these attributes as part of a framework is helpful
in developing a workable definition of the term. The following are a
compilation of attributes offered by various scholars.
Organized crime groups:
•
Are non-ideological (i.e., has no political goals)
•
Are hierarchical
•
Have a limited or exclusive membership
•
Are self-perpetuating (i.e., continues over time)
•
Use illegal violence (or the threat of it) and bribery
•
Demonstrate a specific division of labor
•
Are monopolistic
•
Are governed by explicit rules and regulations, which
include a code of secrecy
We should point out that none of these attributes alone
serve as definitions of organized crime, but collectively, they paint
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a picture of the organized crime group. Next, we consider the
meaning of each of these attributes.
When a criminal group is non-ideological, it possesses
no political agenda of its own. Unlike some terrorist groups, for
example, which espouse very specific political motives, the nonideological criminal group is motivated by profit.
Experts are in widespread agreement that organized
crime groups are highly structured in a hierarchical fashion with an
order of authority. More controversial is the question of how highly
structured these groups are. Such groups are headed by a few top
leaders, while the majority of the rank-and-file members are lowlevel and subservient. The Italian La Cosa Nostra, the Hell’s Angels
motorcycle gang, and the Black Guerilla Family prison gang are all
considered organized crime groups, and all have a self–hierarchy of
command.
A limited or exclusive membership is another attribute of
organized crime groups. Criminal leaders are selective as to who
become members. After all, if not careful, the crime group could
accidentally recruit police informers, undercover agents, or rebels
working on behalf of other criminal organizations. As a rule, this
attribute refers to ethnic background, kinship, race, long-time
friendships, prison relationships, or other variables that make the
recruit an attractive candidate for membership. One’s abilities can
also be a factor. For example, the ability to fight, willingness to
engage in criminal acts, the ability to keep secrets, and the ability
to follow orders are also important to organized crime leaders.
Organized crime groups are self-perpetuating, which
means that they are designed to persist through time beyond the
lives of current members. When members are removed either by
dying or being sent to prison, they are easily replaced with new
recruits eager to gain acceptance by the group arid to continue the
illegal enterprises of the organization. The use of illegal violence
and bribery is a hallmark of organized crime groups. Violence is
essential to ensure compliance with the rules of the organization
and to safeguard the attainment of organization goals. Although
used only when necessary, violence results in both specific
discipline and as a general message for others. Bribery is another
important component of the protection of criminal enterprises and
the secrecy of members. As with the use of violence, bribery is used
only when needed.
As with many legitimate business enterprises, organized
crime groups make use of specific functional positions that are
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filled by the members who are most suited for the task. This
division of labor is evidenced by the positions of enforcer, money
movers and corruptors, each of whom is delegated with specific
tasks to further organizational goals. The problem of competition
creates the need for organized crime to be monopolistic in nature.
The group will strive to be in control of a particular criminal racket
or even legitimate enterprise. The word monopoly also implies that
to increase profits, free trade will be restrained. Such is the case
with organized crime. We should point out, however, that not all
criminal rackets are conducive to monopolization, as will be seen
with the fragmented nature of the illicit drug trade.
Finally, rules and regulations are an important attribute
in organized crime. Like legitimate business, successful organized
crime groups have established rules and regulations to which
members must adhere. Some of these rules and regulations are
simply procedures related to a particular illicit enterprise, such as
how betting slips and money are transferred to a central gambling
bank. Others are often simply common sense, such as a code of
silence and prohibited behavior for members (e.g., rules against
drug use by members in some drug syndicates). Most of the larger
organized crime groups, such as the La Cosa Nostra, the Cali cartel,
and the Hell’s Angels, have well-enforced rules and regulations.
UNDERSTANDING THE MAFIA
The organization most commonly associated with
organized crime is the Mafia, a term that writers, filmmakers,
historians, and others often use as a benchmark for understanding
the phenomenon of organized crime. In an effort to appreciate the
organizational aspects of what become known as the Mafia, it is
logical first to consider the meaning of the word. By most accounts,
the word Mafia didn’t show up in print until the mid-1860s, and
was thought to be a word understood by most Sicilians. Considered
a dialect word from the poorer districts of Palermo, Sicily, “Mafia”
and “mafioso" commonly referred to beauty, perfection, grace, and
excellence, but when applied to a man, mafioso “connotes pride,
self-confidence, and vainglorious behavior”.
By the mid-19th century, the term “mafioso" became
synonymous not just with crime, but suggested a certain type of
criminal behavior and attitude as well. When putting the word to
use, Sicilians refer to a “man of honor” or “man of respect” who
embodies not just a criminal but other personality characteristics
as well. These include the village strong-arm man, the boss and
mediator of many conflicts. Rather than using the term “Mafia”
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directly, people speak of them amid “friends of friends.” It is this brand
of communication that characterizes those organized patron-client
relationships that are typically controlled by a mafioso. According to
traditional concept, the mafioso is brave and self-reliant, a man of
action, and one not to be taken lightly. Most importantly, the mafioso
is prepared to become a law unto himself if necessary.
Although there is considerable consensus about the meaning
of the word “Mafia,” its origins are not as clear. Some historians
trace its origin to the Sicilian struggle in the 13th century against
French rule. “Morte alla Francia, Italia anela!” was their cry (“Death
to France, Italy groans”), forming the acronym MAFIA. Others suggest
that the term originated as far back as 1282 as a battle cry of rebels
who slaughtered thousands of Frenchmen after a French soldier
raped a Palermo maiden on her wedding day. Whatever the source,
the term has become familiar throughout much of the world and is
often synonymous with such criminal activities as drug trafficking,
gambling, extortion, and murder.
But organized crime is much more than is conjured up by
the term “Mafia.” Although experts in the field are somewhat divided
regarding components of the organized crime phenomenon, there is
a degree of consensus regarding the aspects of an organized crime
organization. For example, many experts agree that organized crime
represents profit-motivated, criminal enterprise that employs the
use of fear, violence, intimidation, and public corruption to achieve
organizational goals and remain immune from law enforcement. In
addition, criminal activity is probably restricted to the provision of
illegal goods and services. Debate continues among experts, however,
regarding the extent to which organized crime has achieved success in
monopolizing any given illegal market.
CATEGORIES OF ORGANIZED CRIMINAL BEHAVIOR
Organized crime is a unique and dynamic phenomenon that
permeates virtually all segments of society. However, it differs from
other types of criminal activity in several important aspects. For
example, some categories of behavior practiced by organized crime
organizations are not applicable to many other types of criminal
groups or gangs. Accordingly, it is these categories of behavior that are
most commonly associated with “organized crime” activities, because
many types of specific crimes are contained within each category.
These categories include provision of illicit services, provision of illicit
goods, conspiracy, penetration of legitimate business, extortion, and
corruption. Once these categories are understood, it will be easier to
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comprehend the many different definitions and models of organized
crime that are discussed later in the chapter.
PROVISION OF ILLICIT SERVICES
The offering of illicit services represents one of the main
enterprises of organized crime organizations illicit services are those
that legitimate businesses do not provide and which are proscribed
by law. Included are (1) gambling operations that act outside the
law and offer a financial tax incentive for those who use this service;
(2) protection rackets, a form of extortion by which organized crime
members approach owners of small businesses and offer them
“protection” for the business in case of “unforeseen” misfortune, such
as fire or vandalism; (3) loansharking, the illegal lending of money at
usurious rates, whose repayment is enforced through violence and
intimidation; and (4) prostitution, the sale of sex acts by persons
acting as part of a larger organization. The provision of illicit services
comprises criminal enterprises in which money can be generated
for the furtherance of organizational goals. Also, in many cases the
provision of illicit services is done in conjunction with the offering of
illegal goods.
PROVISION OF ILLICIT GOODS
Like illicit services, a second hallmark of organized crime
is the provision of illicit goods, which are not available in legitimate
society. Again, vice-related commodities are often associated with this
enterprise. In particular, illegal drugs represent one of the primary
products in considerable Black market demand. Illicit drugs include
marijuana, cocaine, and heroin, to name a few, and the provision of
these drugs provides organized crime organizations with billions of
revenue4ree dollars every year. In addition, pornography represents
another Black market commodity that generates billions of dollars
annually. Unregistered guns and stolen goods are yet other examples
of products in considerable demand which illicit dealers can sell at
lower prices and with more ease than that available to licit distributors.
CONSPIRACY
Another vital category of organized criminal behavior is that
of conspiracy, an agreement between two or more people to violate the f
aw. In most cases, organized crime members work in concert with each
other for the purpose of selling drugs or stolen property, loansharking,
gambling, and other activities related to organized crime. Very seldom
